The Devil's Playbook: Big Tobacco, Juul, and the Addiction of a New Generation - Lauren Etter

[Saluki]

I'm more than half way through this book and would highly recommend it to anyone interested in the tobacco industry.  It covers the development of Juul and some of the other non-tobacco nicotine products. If you didn't have a low opinion of management at some of these companies before, this book will enlighten you.  The Altria guys, were slow moving and stupid, which is not a good combination. When Juul (then called Ploom) was a startup and needed a few million of seed capital, the private equity guys and other tobacco companies were falling over themselves and flying out to silicon valley to meet with these guys and see what they were doing, but Altria made Ploom come to Richmond for a meeting and then an idiot Altria lifer named "Captain Jack" Nelson literally put his feet up on his desk and talked down to them. A few years later they would pay $10 billion for a minority stake in the company, at a valuation that was twice what the prior round valued the company at a few months prior. Add the billions that they overpaid for chewing tobacco and a few other bad ideas and soon those billions start to add up to real money. 

 

These cigarette guys had a weird fetish about tobacco leaves.  One industry higher up thought that the vape stuff wouldn't catch on because it had no tobacco. It didn't burn anything.  Why would anyone want it?  They want it for the nicotine!  Without nicotine, smoking a cigarette would be as popular as blowing bubbles or lighting a sparkler. They didn't get it. And the slow movement was a sign of pride for them--a feature not a bug.  One CEO said that over your career "progress" is moving the clock hand from noon to 12:03.  If you try to move it from noon to 3pm, you will be canned.  

 

The chemistry stuff about the nicotine salts is particularly interesting and it's what gave Juul an edge. About 10% of smokers who tried a vape ending up switching. When Juul mastered the chemistry, about 60% of smokers who tried Juul switched.  Fascinating read.  

[Xerxes]

Looks interesting … I need a good book on that industry. For so long, I have heard of the glorious march of Altria (valuation x) but with no context 

[Morgan]

It's hard not to be surprised by these guys slow behavior. They've done so well, for so long, that going fast doesn't change much in the tobacco world. They obviously missed that the tech world is much different.

 

Sounds like a good book! 

Edited July 11, 2023 by Morgan

[brobro777]

I understand you guys love to do touchdown celebrations everyday about how much Altria sucks but think about how good the underlying business must be to survive management that terrible and incompetent!